Banker pleads guilty to Libor fraud

[Diego Napier]

http://www.bbc.co.uk/news/business-29520685

Do we think they'll get more or less than the 6 months someone got for stealing a bottle of water in the London Riots?

How has it affected you?
I presume you've never broken the speed limit or taken anything from a hotel bathroom?

Are you really that dim?

The issue is the magnitude of the crime, it's impact on society as a whole and the applicability of a deterrent sentence.

 

[beorhthelm]

10 years should be about right plus paying back every penny it cost the 'hard working taxpayer'

what if it didnt cost the "hard working tax payer"? what if they even benefited? (you do understand what was going on with Libor, right?)

 

[cunning fergus]

Can we just for once not let this thread descend into 10 pages of meaningless left vs. right claptrap. The vast majority of people in this country have ceased to care whether it's the self serving c*** in blue or the self serving c*** in red who's f****** us in this particular situation. The truth of the matter is they're all f****** us.

It doesn’t have to be a meaningless descent into 10 pages at all, the known facts are that the “bankers” were able to act recklessly and fraudulently for many years because the politicians in charge at that time were either incompetent, reckless or both.

How the Gov’t at that time treated RBS is a case in point, and we know exactly what this incompetence and/or recklessness ultimately cost the taxpayer………………frankly it makes what has arisen in this Libor fraud look like the theft of a shower cap from a hotel.

http://www.parliament.uk/business/c...r-of-abn-amro-says-treasury-committee-report/

For the avoidance of doubt paragraph 18 of this treasury committee report states:

The Report gives a number of examples of the pressure that the FSA came under from Government to avoid an intrusive supervisory approach. One such example cited by the FSA refers to a Treasury press release dated 24 May 2005, at the launch of the Better Regulation Action Plan. In the press release, the then Chancellor Gordon Brown is quoted as saying "… the new model we propose is quite different. In a risk based approach there is no inspection without justification, no form filling without justification, and no information requirements without justification. Not just a light touch but a limited touch".

If you want to have a thread just on the narrow conduct of the bankers, and have a good gnaw at this bone the public has been thrown in this case then knock yourself out, however there are others “at large” equally culpable for bankers causing economic chaos, if not more so, in fact some are standing for senior roles in the Government again.

You evidently wouldn’t be happy with an apology from this particular banker and then let him go back to his job……………..yet that is exactly what you seem to advocate for the politicians.

 

[Herr Tubthumper]

You evidently wouldn’t be happy with an apology from this particular banker and then let him go back to his job……………..yet that is exactly what you seem to advocate for the politicians.

?? Spring Hall's earlier comments about self-serving ****s make me think he is not keen on the current lot keeping their jobs? Or did I misinterpret this?

 

[spring hall convert]

It doesn’t have to be a meaningless descent into 10 pages at all, the known facts are that the “bankers” were able to act recklessly and fraudulently for many years because the politicians in charge at that time were either incompetent, reckless or both.

How the Gov’t at that time treated RBS is a case in point, and we know exactly what this incompetence and/or recklessness ultimately cost the taxpayer………………frankly it makes what has arisen in this Libor fraud look like the theft of a shower cap from a hotel.

http://www.parliament.uk/business/c...r-of-abn-amro-says-treasury-committee-report/

For the avoidance of doubt paragraph 18 of this treasury committee report states:

The Report gives a number of examples of the pressure that the FSA came under from Government to avoid an intrusive supervisory approach. One such example cited by the FSA refers to a Treasury press release dated 24 May 2005, at the launch of the Better Regulation Action Plan. In the press release, the then Chancellor Gordon Brown is quoted as saying "… the new model we propose is quite different. In a risk based approach there is no inspection without justification, no form filling without justification, and no information requirements without justification. Not just a light touch but a limited touch".

If you want to have a thread just on the narrow conduct of the bankers, and have a good gnaw at this bone the public has been thrown in this case then knock yourself out, however there are others “at large” equally culpable for bankers causing economic chaos, if not more so, in fact some are standing for senior roles in the Government again.

You evidently wouldn’t be happy with an apology from this particular banker and then let him go back to his job……………..yet that is exactly what you seem to advocate for the politicians.

My point is that the Tories did nothing about it. They were perfectly happy with the light touch regulation at the time. That's my point. They're all bent, they're all incompetent, I expect it from politicians. I just don't want this turning into a blue versus red slanging match because it's boring, dated, pointless and inappropriate.

 

[Mattywerewolf]

Do you know in which direction libor rates were manipulated higher or lower?
Doesn't make it any less of a crime but if his intention was to keep the rate lower then it's possible that you aren't the victim that you are making out.

what if it didnt cost the "hard working tax payer"? what if they even benefited? (you do understand what was going on with Libor, right?)

Libor rates were artificially manipulated DOWN. So if you are a mortgage holder you probably benefited if on a variable rate. If however you are a saver, your rate of interest received could have been lower than it should have been. (assuming it was passed on by your bank).

So it will have been positive for some while negative for others. Either way it was blatant manipulation, and if the Regulators were properly keeping an eye on this it could have been prevented.

 

[GT49er]

.............

For the avoidance of doubt paragraph 18 of this treasury committee report states:

The Report gives a number of examples of the pressure that the FSA came under from Government to avoid an intrusive supervisory approach. One such example cited by the FSA refers to a Treasury press release dated 24 May 2005, at the launch of the Better Regulation Action Plan. In the press release, the then Chancellor Gordon Brown is quoted as saying "… the new model we propose is quite different. In a risk based approach there is no inspection without justification, no form filling without justification, and no information requirements without justification. Not just a light touch but a limited touch".

Should have been called the 'Chancellor's Regulation Action Plan'.................

 

[severnside gull]

It doesn’t have to be a meaningless descent into 10 pages at all, the known facts are that the “bankers” were able to act recklessly and fraudulently for many years because the politicians in charge at that time were either incompetent, reckless or both.

How the Gov’t at that time treated RBS is a case in point, and we know exactly what this incompetence and/or recklessness ultimately cost the taxpayer………………frankly it makes what has arisen in this Libor fraud look like the theft of a shower cap from a hotel.

http://www.parliament.uk/business/c...r-of-abn-amro-says-treasury-committee-report/

For the avoidance of doubt paragraph 18 of this treasury committee report states:

The Report gives a number of examples of the pressure that the FSA came under from Government to avoid an intrusive supervisory approach. One such example cited by the FSA refers to a Treasury press release dated 24 May 2005, at the launch of the Better Regulation Action Plan. In the press release, the then Chancellor Gordon Brown is quoted as saying "… the new model we propose is quite different. In a risk based approach there is no inspection without justification, no form filling without justification, and no information requirements without justification. Not just a light touch but a limited touch".

If you want to have a thread just on the narrow conduct of the bankers, and have a good gnaw at this bone the public has been thrown in this case then knock yourself out, however there are others “at large” equally culpable for bankers causing economic chaos, if not more so, in fact some are standing for senior roles in the Government again.

You evidently wouldn’t be happy with an apology from this particular banker and then let him go back to his job……………..yet that is exactly what you seem to advocate for the politicians.

The regulatory framework may have given them the OPPORTUNITY to break the law but it was not the government (of whatever flavour) who CHOSE TO BREAK THE LAW. That was the bankers.
Trying to excuse their illegal and socially damaging behaviour is something one would only expect from.........ooh let me see...... A banker?

 

[drew]

http://www.bbc.co.uk/news/business-29520685

Do we think they'll get more or less than the 6 months someone got for stealing a bottle of water in the London Riots?

How has it affected you?
I presume you've never broken the speed limit or taken anything from a hotel bathroom?

Assuming you are being literal rather than facetious, then what the banker did was considerably worse than someone taking a bottle of water. The perception is that the manipulation was done to help the banks make more money and, ergo, earn massive bonuses for the staff. Whether the reason this particular banker isn't being named is because he is blowing the whistle on those above him that either got him to break the rules or put enough pressure on him that this was the only option remains to be seen. A jail term is certainly warranted and probably personal fines equivalent to whatever bonuses he earned during that time!

It doesn’t have to be a meaningless descent into 10 pages at all, the known facts are that the “bankers” were able to act recklessly and fraudulently for many years because the politicians in charge at that time were either incompetent, reckless or both.

How the Gov’t at that time treated RBS is a case in point, and we know exactly what this incompetence and/or recklessness ultimately cost the taxpayer………………frankly it makes what has arisen in this Libor fraud look like the theft of a shower cap from a hotel.

http://www.parliament.uk/business/c...r-of-abn-amro-says-treasury-committee-report/

For the avoidance of doubt paragraph 18 of this treasury committee report states:

The Report gives a number of examples of the pressure that the FSA came under from Government to avoid an intrusive supervisory approach. One such example cited by the FSA refers to a Treasury press release dated 24 May 2005, at the launch of the Better Regulation Action Plan. In the press release, the then Chancellor Gordon Brown is quoted as saying "… the new model we propose is quite different. In a risk based approach there is no inspection without justification, no form filling without justification, and no information requirements without justification. Not just a light touch but a limited touch".

If you want to have a thread just on the narrow conduct of the bankers, and have a good gnaw at this bone the public has been thrown in this case then knock yourself out, however there are others “at large” equally culpable for bankers causing economic chaos, if not more so, in fact some are standing for senior roles in the Government again.

You evidently wouldn’t be happy with an apology from this particular banker and then let him go back to his job……………..yet that is exactly what you seem to advocate for the politicians.

You obviously know quite a bit more so I wonder if you can put a bit more meat to the bone. You say that the ABN takeover and subsequent demise of RBS has cost the taxpayer. Are you talking about the cost of the bail out. If so, is this the value of the shares because my understanding is that if they are sold back at the right time then the treasury should recoup what was put in, possibly more. Alternatively, are you talking about the knock on effects to the economy? With regard to Libor, doesn't this underpin approaching $400 trillion of derivatives so surely that is greater than the saving of one bank? Also, with regard to regulation, wasn't the manipulation going on from 1991, long before the FSA came into existence. I think one of the documents you referred to was quite critical of the B of E and their role in the ABN fiasco but surely they would have been responsible for regulation in 1991.

Successive governments have certainly betrayed the country and the electorate with the way they have sucked up to the city and that is probably more to do with the fact that those in the City are more intelligent (and in some cases more devious) than those that sit in power!

 

[CheeseRolls]

What difference would a stiff sentence make in these cases ? A severe dose of terminal Ernest Saunders and whoosh off they go to live out their last few days/decades with their loved ones. Or is that just too cynical ?

 

[Vegas Seagull]

I'd suggest you do some reading about what the Libor rate actually is. As I understand this fruad will have affected many of us with mortgages, credit cards or derivatives.

Detailed analysis of monetary affect on me
£0 + £0 + £0 = £0 for me

Now your turn?

 

[drew]

I'd suggest you do some reading about what the Libor rate actually is. As I understand this fruad will have affected many of us with mortgages, credit cards or derivatives.

Detailed analysis of monetary affect on me
£0 + £0 + £0 = £0 for me

Now your turn?

So you don't have a mortgage/credit card of derivatives. However, maybe the people that own the place where you live do (assuming you are either living with your parents or rent). Maybe people around you that contribute to your lifestyle were affected!

 

[beorhthelm]

So you don't have a mortgage/credit card of derivatives. However, maybe the people that own the place where you live do (assuming you are either living with your parents or rent). Maybe people around you that contribute to your lifestyle were affected!

not very likely. very few retail loans (or savings) are based on Libor as i understand. it may have impacted a few businesses if they had large loans and brought complex options to protect them from interest rate rise, but there's a bigger issue of mis-selling there. those impacted by Libor manipulation, which was tiny increments at the end of the days trading, not wholesale sustained movements over time, were banks and other big players in the money markets. the impact is a non-issue, the story is really about the lack of a properly regulated process upon billions/trillions does depend. if there wasnt a banking crisis story already, this wouldnt be heard beyond the FT.

 

[drew]

not very likely. very few retail loans (or savings) are based on Libor as i understand. it may have impacted a few businesses if they had large loans and brought complex options to protect them from interest rate rise, but there's a bigger issue of mis-selling there. those impacted by Libor manipulation, which was tiny increments at the end of the days trading, not wholesale sustained movements over time, were banks and other big players in the money markets. the impact is a non-issue, the story is really about the lack of a properly regulated process upon billions/trillions does depend. if there wasnt a banking crisis story already, this wouldnt be heard beyond the FT.

Fair enough but is hard to believe that activities by a bank on a global investment market don't have some knock on effect on the retail banking sector whether that be positive or negative for the end consumer.

 

[Crispy Ambulance]

Did some sub-prime lenders, eg, Swift, link their interest rates for consumer loans to libor?

 

[cunning fergus]

My point is that the Tories did nothing about it. They were perfectly happy with the light touch regulation at the time. That's my point. They're all bent, they're all incompetent, I expect it from politicians. I just don't want this turning into a blue versus red slanging match because it's boring, dated, pointless and inappropriate.

So the Tories are responsible for the light touch regulation at the time despite not being in power?

I am not a Tory apologist by a long chalk but a complicit opposition is not the same as a incompetent Govt........hence the flow of apologies on Labour's failures to control financial services from Balls and Miliband since 2010. Remember Labour created the FSA in 2000, it is their baby. They deliberately made it weak and created the environment for firms and banks to go for broke.

No one in Govt at the time cared about responsible mortgage lending, or provision of credit during the housing bubble, because growth was high and associated Govt taxes on bank dividends, profit and stamp duty was higher than ever.

Plenty of experts called the bubble........Brown announced he had abolished boom and bust.

He is not standing for election now, those who were advising him on policy are.........that's why it matters.

 

[cunning fergus]

The regulatory framework may have given them the OPPORTUNITY to break the law but it was not the government (of whatever flavour) who CHOSE TO BREAK THE LAW. That was the bankers.
Trying to excuse their illegal and socially damaging behaviour is something one would only expect from.........ooh let me see...... A banker?

I am not excusing at all, throw the book at the banker for all I care, however to assume that it was just bankers breaking the law is to ignore the incompetence of our Govt, who are elected to control the country.

Balls apologised (again) for Labours failures at their recent conference.........yet he is getting a second chance for election, this time as chancellor.

If the banker receives justice he should (rightly) not get the opportunity to work in banking again and return his bonuses.

The collapse of the British banking system in 2008 was so serious (and it's legacy so damaging) that all I ask is that those connected to the last Government's decision making group on financial services should get the same treatment........not unreasonable I am sure you would agree.

 

[Mattywerewolf]

@%1;

not very likely. very few retail loans (or savings) are based on Libor as i understand. it may have impacted a few businesses if they had large loans and brought complex options to protect them from interest rate rise, but there's a bigger issue of mis-selling there. those impacted by Libor manipulation, which was tiny increments at the end of the days trading, not wholesale sustained movements over time, were banks and other big players in the money markets. the impact is a non-issue, the story is really about the lack of a properly regulated process upon billions/trillions does depend. if there wasnt a banking crisis story already, this wouldnt be heard beyond the FT.

Actually pretty much all loans (including mortgages) are linked to LIBOR indirectly. The banks that offer them to you borrow at LIBOR rates and then set rates to achieve their desired profit margin. That's why often you see mortgage rates go up when LIBOR starts moving up. They are often slower to drop them when rates fall however! The way the rates are set is designed to prevent rigging since the outliers from all the bank quotes are omitted. The real issue here is that lots of traders at lots of different banks colluded to set the rates. If these rates had not consistently been misstated the spikes on a given day would have been obvious to even the most unobservant regulator.

 

[cunning fergus]

?? Spring Hall's earlier comments about self-serving ****s make me think he is not keen on the current lot keeping their jobs? Or did I misinterpret this?

Or the previous lot, who have admitted the got it wrong when they last held the levers of power but are standing for re-election.........

 

[drew]

So the Tories are responsible for the light touch regulation at the time despite not being in power?

I am not a Tory apologist by a long chalk but a complicit opposition is not the same as a incompetent Govt........hence the flow of apologies on Labour's failures to control financial services from Balls and Miliband since 2010. Remember Labour created the FSA in 2000, it is their baby. They deliberately made it weak and created the environment for firms and banks to go for broke.

No one in Govt at the time cared about responsible mortgage lending, or provision of credit during the housing bubble, because growth was high and associated Govt taxes on bank dividends, profit and stamp duty was higher than ever.

Plenty of experts called the bubble........Brown announced he had abolished boom and bust.

He is not standing for election now, those who were advising him on policy are.........that's why it matters.

Didn't deregulation of the banks begin under Tories? So the Tories began deregulation, were for far lighter regulation than that enacted by Brown and so is it any wonder that tighter regulation didn't exist? Also, the perception is that the three elements of the Tripartite regulatory system didn't really communicate and that is where it failed, not because the FSA was weak (or, in fact, weaker than the other two parties). In the Libor scandal, the Bank of England doesn't come out smelling of roses but has still been given more power by Osborne. There were a lot of parties complicit in the failings, BofE, FSA, Treasury, the Opposition, the Banks but the culprits were the bankers that actually manipulated the rates.